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Q2/2018: Deutsche Börse AG maintains strong growth momentum

Release date: 25 Jul 2018 | Deutsche Börse

Q2/2018: Deutsche Börse AG maintains strong growth momentum

Net revenue up 10 per cent in Q2/2018, to €687 million / Earnings per share (adjusted) up 14 per cent year-on-year in Q2/2018 / Net revenue rises to €1.4 billion in the first half of 2018 (+ 11 per cent) / Adjusted net profit for the first half of 2018 at €533 million (+15 per cent) / Results for the first half of 2018 are thus fully within the guidance

Deutsche Börse AG published its results for the second quarter of 2018 on Wednesday. The company generated net revenue of €687.0 million, an increase of 10 per cent compared to the previous year (Q2/2017: €623.6 million). Deutsche Börse thus achieved secular net revenue growth of approximately 7 per cent, in line with its projections. In addition, cyclical effects such as increased interest rate market volatility and higher key interest rates in the US boosted net revenue. At €262.9 million (Q2/2017: €245.4 million), adjusted operating costs were up 7 per cent year-on-year. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) stood at €425.5 million, up 12 per cent on the previous year (Q2/2017: €379.5 million). Adjusted net profit for the period attributable to Deutsche Börse AG shareholders (hereinafter referred to as “net profit”) rose by 13 per cent, to €261.9 million (Q2/2017: €232.8 million). Basic earnings per share, adjusted for exceptional items, amounted to €1.42, up 14 per cent year-on-year (Q2/2017: €1.25).

Deutsche Börse AG thus generated net revenue of €1,378.6 million for the first half of 2018 (H1/2017: €1,247.0 million) – an 11 per cent year-on-year increase. Adjusted operating costs rose by 5 per cent year-on-year, as planned, to €517.4 million (H1/2017: €490.5 million). The increase was primarily due to inflation effects, as well as to higher variable and share-based remuneration. This translated into Group EBITDA of €863.6 million (H1/2017: €759.7 million) and net profit of €532.6 (H1/2017: €465.0 million). Both figures were up 14 per cent and 15 per cent, respectively, year-on-year. Basic earnings per share, adjusted for exceptional items, amounted to €2.87 in the first half of 2018 (H1/2017: €2.49) – a 15 per cent increase.

Gregor Pottmeyer, Chief Financial Officer of Deutsche Börse AG, commented: “We succeeded in generating further secular and cyclical growth in the second quarter, achieving double-digit net revenue growth for the first half of the year. Thanks to the scalability of our business model, we recorded above-average growth in net profit. With this development, we are currently right on track to achieve our guidance of at least 10 per cent earnings growth for the full year 2018.”

Q2/2018 results

With effect from the first quarter of 2018, Deutsche Börse Group introduced a new segment reporting structure designed to highlight the Group’s growth areas and to further improve transparency. Instead of four business segments, as before, reporting is now split into nine segments. Besides the current Eurex (financial derivatives), Xetra (cash equities) and Clearstream (post-trading) segments, the following four business areas will be disclosed separately going forward: EEX (commodities), 360T (foreign exchange), IFS (investment fund services) and GSF (collateral management). Furthermore, the former Market Data + Services segment has been split into STOXX (index business) and Data.

Net revenue for the second quarter of 2018 increased compared to the same quarter of the previous year, by 10 per cent to €687.0 million (Q2/2017: €623.6 million). All reporting segments (except for the Index and Data businesses that recorded very positive developments during the prior-year period) recorded growth rates – some of them being significant. Highest growth rates were achieved in the EEX (commodities), IFS (investment fund services), 360T (foreign exchange) and Eurex (financial derivatives) segments. Net interest income from the banking business posted another marked increase, to €55.0 million (Q2/2017: €33.5 million), largely attributable to the higher level of US interest rates, and to a fee adjustment for cash collateral handling at Eurex.

At €317.2 million, operating costs were markedly higher than in the previous year (Q2/2017: €271.4 million); the figure included exceptional items in the amount of €54.3 million (Q2/2017: €26.0 million). Exceptional items mainly comprised costs for the restructuring announced within the framework of the “Roadmap 2020” strategy programme, litigations, and the integration of acquired subsidiaries. Adjusted for these exceptional items, operating costs increased by 7 per cent, to €262.9 million (Q2/2017: €245.4 million). The result from equity investments amounted to €1.4 million in the first quarter (Q2/2017: €1.6 million).

Deutsche Börse Group’s EBITDA was €371.2 million for the quarter under review (Q2/2017: €353.8 million). Excluding the exceptional items set out above, consolidated EBITDA amounted to €425.5 million, a 12 per cent increase compared to the previous year’s figure (Q2/2017: €379.5 million). Depreciation, amortisation and impairment losses amounted to €58.4 million (Q2/2017: €39.6 million). This increase was attributable in particular to an impairment charge on a technological infrastructure. The Group’s financial result was €–16.6 million (Q2/2017: €–18.1 million). The adjusted effective Group tax rate of 27.0 per cent was in line with expectations (Q2/2017: 27.0 per cent). Accordingly, net profit stood at €210.3 million (Q2/2017: €176.3 million); excluding the exceptional items described above, it was €261.9 million (Q2/2017: €232.8 million). Basic earnings per share amounted to €1.13 (Q2/2017: €0.94). Adjusted for exceptional items, basic earnings per share stood at €1.42 (Q2/2017: €1.25) – an increase of 14 per cent.

Further information:

Please find attached our consolidated income statement and segment reporting. For further details, please refer to the half-yearly financial report for 2018.